News

Gold Loan Restructuring, Shares for Debt and Warrant Repricing

VANCOUVER, BC – March 19, 2020 – INCA ONE GOLD CORP. (TSXV: IO) (Frankfurt:SU9.F) (SSEV: IOCL) (“Inca One” or the “Company”) is pleased to announce it has reached an agreement to restructure certain debts of the Company and closed the previously announced warrant repricing and shares for debt transactions.

Gold Loan Restructuring

Inca One has an obligation to pay 742 ounces of gold to several related parties (the “Creditors”) of the Company pursuant to certain gold loan agreements (the “Gold Agreements”). The value of the gold deliverable under the Gold Agreements is approximately US$1.1 million based on the current price of gold and is payable on demand. The Creditors have agreed to restructure the Gold Agreements (the "Loan Restructuring") in exchange for aggregate notes payable in the amount of US$0.93 million (the “Notes”), representing a reduction in the liabilities of the Company of approximately US$0.16 million. The Notes will have a three-year term and bear interest at an annual rate of 10%. The Notes will be repayable at any time at the company’s option and will be secured by general security agreements.

As partial consideration for the Loan Restructuring, subject to TSX Venture Exchange (the "TSXV") approval, Inca One has agreed to issue an aggregate of 1,388,889 bonus warrants (the "Bonus Warrants") to the Creditors. Each Bonus Warrant will entitle the holder to acquire one common share of the Company (a "Share") at a price of CDN$0.18 per Share for a period of three years from the date of issuance. All Bonus Warrants (and the Shares issuable thereunder) are subject to a statutory hold period of four months plus a day from the date of issuance of the Bonus Warrants in accordance with applicable securities legislation.

The Loan Restructuring and the issuance of the Bonus Warrants are each considered to be a "related party transaction" as defined under Multilateral Instrument 61‑101 ("MI 61‑101") as the Creditors are all related parties of the Company. The Loan Restructuring and the issuance of the Bonus Warrants are each exempt from the formal valuation and minority shareholder approval requirements of MI 61‑101 as neither the fair market value of the Notes nor the Bonus Warrants exceeds 25% of the Company's market capitalization.

Warrant Repricing

Further to the Company's news release dated February 26, 2020, the Company is pleased to announce it has repriced the following warrants (the "Warrant Repricing") issued pursuant to a private placement on January 31, 2018 after receiving TSXV approval:

Number of warrants: 4,540,001
Expiry date of warrants: January 31, 2021
Original exercise price of warrants: $1.00
New exercise price of warrants: $0.40
Accelerated expiry: 30 day expiry after 10 consecutive trading days closing above $0.50

To the extent certain insiders of the Company hold warrants which were repriced, the Warrant Repricing is considered to be a "related party transaction" as defined under MI 61‑101. The insider participation in the Warrant Repricing is exempt from the formal valuation and minority shareholder approval requirements of MI 61‑101 as the fair market value of the warrants held by the insiders does not exceed 25% of the Company's market capitalization.

The Company did not file a material change report more than 21 days before the expected closing of the Warrant Repricing, as the Company wished to close the Warrant Repricing as soon as practicable after receiving TSXV approval for sound business reasons.

Shares for Debt and Shares in Payment for Bonuses

Further to the Company's news release dated February 26, 2020, the Company has issued Shares at a deemed price of $0.20 per Share to the following creditors of the Company in settlement of the Company's indebtedness (the "Debt Settlement") after receiving the approval of the TSXV:

528,986 Shares to certain directors and officers of the company for consulting fees and expenses paid on behalf of the Company; and

529,034 Shares to certain directors, officers and employees of the Company for director fees and executive and employee bonuses.

All Shares issued in connection with the Debt Settlement are subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation.

To the extent certain insiders participated in the Debt Settlement, the Debt Settlement is considered to be a "related party transaction" as defined under MI 61‑101. The insiders participation in the Debt Settlement is exempt from the formal valuation and minority shareholder approval requirements of MI 61‑101 as neither the fair market value of the securities to be distributed in the Transaction in so far as the Debt Settlement involves the insiders, exceeds 25% of the Company's market capitalization.

The Company did not file a material change report more than 21 days before the expected closing of the Debt Settlement, as the details and amounts of the insider participation were not finalized until closer to the closing and the Company wished to close the transaction as soon as practicable for sound business reasons.

About Inca One

Inca One is a Canadian based mineral processing company. The Company's activities consist of the production of gold and silver from the processing of purchased minerals located in Peru. Peru is the 6th largest producer of gold in the world and the Peruvian government estimates the small-scale mining sector accounts for a significant portion of all Peruvian gold production, estimated to be valued approximately US$3 billion annually. The Company purchases its minerals from government-registered, small-scale mining producers from various regions and processes it at its 100%-owned Chala One and 90%-owned Kori One milling facilities, located in Arequipa, Southern Peru.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.

Statements regarding the Company which are not historical facts, including the Company's plans to close the Loan Restructuring and issue the Bonus Warrants, are "forward-looking statements" that involve risks and uncertainties. Such information includes information relating to the Loan Restructuring and the issuance of the Bonus Warrants and can generally be identified by the use of forwarding-looking wording such as "may", "expect", "estimate", "anticipate", "intend", "believe" and "continue" or the negative thereof or similar variations. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements due to factors such as: (i) fluctuation of mineral prices; (ii) a change in market conditions; (iii) unanticipated delays in obtaining or failing to obtain regulatory or TSXV approvals for the Loan Restructuring and the issuance of the Bonus Warrants; and (iv) the fact that future operational results may not be accurately predicted based on the information available at the time. Except as required by law, the Company does not intend to update any changes to such statements. Inca One believes the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included herein should not be unduly relied upon.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.